John Paulson's ABX Oracle Paolo Pellegrini Discusses Anemic Real Stock Returns, Blasts Federal Reserve
The man who "made billions of dollars for John Paulson shorting real estate," Paolo Pellegrini of PSQR LLC, discusses his economic outlook and investment strategies.
- Stay away from US fixed income asset: he is short USTs and Agencies
- Much more demand for commodities, specifically oil: "these are the real assets you want to be in"
- US Equities: "trend growth will be much less than in the past and that affects equity valuations" - there will be less efficiency, less activity, less real growth, which will affect stock valuation. "You will have anemic real returns on stocks."
- What should the Fed be doing? "We should focus on market based way of reducing household liabilities, basically restructure mortgages one by one and whoever made the mortgages should bear the brunt of the losses" Zero Hedge agrees wholeheartedly
- "Long-term let's change the mission of the Federal Reserve: let's codify something that prevents it from running amok, like it did for the past ten years"